The premium tax rate will drop from 1.75 percent to 1.5 percent under Gov. Malloy’s budget plan.
“Restructuring and lowering the premium tax will substantially improve market conditions for Connecticut-based insurance companies,” said Gov. Malloy in a statement. “This change will save them millions in taxes paid to other states across the country.”
Tax rates on insurance premiums vary across the country, ranging from 0.5 percent up to 4.35 percent. In many states, a retaliatory tax forces insurance companies to pay their home state’s tax rate if it is higher than the tax rate in the state they’re doing business in. For example, Iowa has a premium tax rate of less than 1 percent, but Connecticut-based insurers doing business in Iowa pay 1.75 percent.
If Gov. Malloy’s proposal is approved by the state legislature, the lower premium tax rate would be effective Jan. 1, 2018, according to the report.
More articles on payer issues:
Aetna’s Q4 net profit falls 57%, but still beats forecasts
8 recent payer, provider agreement disputes, resolutions
25 things to know about Blue Cross Blue Shield | 2017
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
